For this week’s Special Report on production companies, SHOOT canvassed shop execs and owners for their feedback on the industry. We asked them the following questions: How would you assess the state of the production business? How are things changing? Is diversification becoming more important than ever? If so, what are some areas your company has moved into? What are some other issues facing production companies? Below are their answers.
Lou Addesso
President
Creative Film
Management International
(CFM), New York
The state of the production business today seems to have developed into a joint effort between the production company, advertising agency and client. This modern-day combination not only depends on a good product and talented creatives, but the give-and-take personalities of all the team players. These components will inevitably determine if the end product is good, bad or—because of too much compromising—watered down.
I have always believed diversification is important. Our company is beginning to move into markets abroad, and developing film projects and reality shows with our directors. … With the state of today’s economy, the biggest issue is producing an exceptional product creatively and economically, [while] trying hard not to get anyone’s nose out of joint.
Jeff Armstrong
Managing director
A Band Apart, Los Angeles
Our business follows the general economy, usually with a three to six month delay. If the economy improves, our business generally improves. Overall, budgets are tighter than ever, especially in music videos, which historically have been a big piece of the business at A Band Apart. The ideas remain big of course, but [there’s no] money to execute them properly! I’ve also noticed a distinct trend of A-level directors going after B-level work. They may not put the work on the reel, but they are going after it nonetheless. We are still faced with an oversupply of directors and companies going after the same amount of work. There has to be a continued falling out.
Diversification is critical, as long as it aligns with our core business. We produce commercials and music videos. It is what we are good at. I have watched so many companies lose money trying to be a cat when they are an iguana. I have yet to hear of anyone in our business (except post houses) making money in the so-called new arenas like branded content and gaming.
We are diversifying in the following ways: We have used our production knowledge to partner with ad agencies and co-produce work, using agency creatives to direct. We have also shot the live-action pieces of several commercials as a sub-contractor to VFX houses. We opened a Hispanic division, Mojo @ A Band Apart, partnering with Mojo out of Uruguay, and moving their executive producer to Los Angeles. The Hispanic market is the fastest growing piece of business in the United States, and we wanted to enter into that business correctly and respectfully.
Other issues: the fact that clients have a hard time differentiating between mark-up and profit. We are also getting hammered in areas that have traditionally been profit centers (small profit centers, but still), such as insurance and P&W.
Don Block
Co-Founder/executive producer
GARTNER, bicoastal
The commercial production business has been in a long-term downtrend for reasons that we are all aware of—we have moved away from a world of three television networks to a world with a plethora of entertainment choices.
In the near term, we have—and will continue to—experience an upturn in momentum in the business as employment and capital expenditures gain strength throughout the economy. As we continue to see convincing evidence of a strong recovery, we should experience strength in the commercial industry as companies compete for their share of this healthier market.
In order to succeed in this secular downtrend, strong focused management is essential. Well-run businesses with great talent will continue to flourish, even in this environment.
Diversification as a reaction to a slowdown in the commercial industry may or may not be the right move. If a company diversifies outside of their core competency, it can draw off much needed resources that are essential to the core business and hasten its demise.
If you are going to diversify, it’s important to ask: What is the relevance of this new business to the world of commercial production? What skill sets do we have to make this diversification successful? In many cases of company diversification, the craft may seem similar, but the business couldn’t be more different. Rather than diversifying, companies might be better served to remain focused on their core competency, cultivate their talent and streamline their businesses.
Eric Bonniot
Executive producer
Uncle, Santa Monica
There has been a noticeable pickup in production this year. There is a lot of optimism in the industry in general and that seems to be driving more work. We have been moving ahead at a hectic pace, with nearly all of our directors in production in the first quarter.
Things in the industry are changing in a lot of ways. I think that advertisers are across the board expecting more work, and at the same—if not better—quality for smaller budgets. I also think that brands themselves are starting to liaise more closely with production companies to tap into their visual sensibilities. We have found that a lot of advertising agencies and brands are thinking beyond the traditional :30 TV spot, and are coming directly to us for alternative solutions that span the Web, DVD, television, short film and other venues.
We had the benefit of launching Uncle as we saw the industry changing—so we started as a company that wanted to be focused on the new paradigm of advertising. To that end, we have a commercial division and a content division producing both traditional spotwork and branded entertainment in television, film and the Web. I think that you need to have access to a multi-disciplined team of creatives in order to adequately service clients.
There are a lot of issues facing production companies—depleting returns, shifting relationships. Advertising and brand building in general is shifting drastically in light of on-demand television and DVRs. Brands have to find smarter ways to stretch their advertising dollars and to be relevant. Although these issues make the process more complicated, they force those of us in production to work more creatively and come up with interesting new ways of doing things.
Dan Duffy
Executive producer
Hungry Man, bicoastal/
international
Some of the same issues that have faced us all in the past are still affecting us now. The same theme from last year and every other year is tighter budgets and shorter schedules.
We’re being asked to do more for less and quicker than before—it’s just the way things are and I don’t see that changing. Also, we’re seeing clients becoming more "creative" in trying to persuade all of our companies to bid jobs differently. I think everyone else has been noticing this trend too, but it seems to be backing off a bit. If the clients put too much pressure on the agencies to squeeze us, then it just hurts the creative output for everyone in the long run and is bad for our industry and their industry alike. Nevertheless, this has been a busy year in all sectors, and hopefully the pace will continue into the next.
I don’t think diversification is really becoming the most important thing ever—as a new trend, anyway. Innovation in relation to production problems and creative ideas has always been a part of what the production community does. Most of us try to find new ways of executing an idea—no one likes repeating themselves if they can avoid it. And some diversification in terms of developing new revenue streams is happening, but I don’t think the model of business we are in is dead yet either.
Kerstin Emhoff
Executive producer
HSI Productions, bicoastal
I’m afraid to assess the state of the production business. I could be like George Bush and say that the "state of our union is strong" even though it’s not. I think it feels stronger, but it’s inconsistent, changing weekly in some cases. I’ve stopped trying to predict—I just check my horoscope. Budgets are much less. I feel that clients are more unreasonable in their demands and they assume that all deadlines and budgets will work out. Someone will do it. It’s not as important to work with the "perfect" director if someone else will do it for less. Agencies seem to be struggling internally to gain strength with their clients and vendors. Many agencies seem quite vulnerable after the "purges" of the last few years.
I don’t know how any business that’s linked to rapidly changing technologies could not feel that diversification is important. The problem is that sometimes a company can push so hard in other areas that they neglect their core business. Commercials will change. When, where, and to what will be a subject we can all discuss on the multitude of panels created to predict our future. Diversification is good for any company, as long as the expansion makes sense. We have expanded into music videos, movies, video games and even a new media festival that brings them all together. We have been deliberate and smart about new ventures. As [those ventures] grow, they have made our foundation stronger. If they don’t grow (like the dot-com ideas), we remain solid and move on. It has become harder and harder to build a solid foundation with a business that has to finance such large amounts of money before they are paid by their clients. Our business model would be considered crazy in any other industry. It’s no wonder why it is so hard for a smaller company to stay around.
Joanne Ferraro
Managing director
Coppos, bicoastal
The state of the production business has improved since last year, and the year before. There seems to be more work being produced and less production is leaving the country. There may be less runaway production due to the weak U.S. dollar.
Diversification is very important to survival. Although production for the traditional commercials has picked up, it will never be what it was in the past decade. We are in development for films and TV shows. We have produced short films. The biggest challenge we are facing is developing new talent. It takes so much more time to get a director launched. Top directors are, as they have done since the downturn in our industry, taking lower budget jobs that traditionally would be passed to the new crop of directors. It is still important to develop new talent, and great patience is needed.
Rick Fishbein
Executive producer
Green Dot Films, Santa Monica
Green Dot seems to be chugging along fine. With an established roster, we are able to offer directors that are trusted, and with a track record that speaks for itself. In building a base of loyal agencies and clients, we can depend on a great deal of repeat business, which is crucial in this economy. The business seems to be cautiously expanding in that in the past three years, many clients would only produce one spot at a time. Lately, we have been seeing the return of multiple package spots.
The biggest issues we are facing are finding the best creative work and being able to design to those budgets. It seems that some of the best work has the least amount of financial resources. We have had success in working in DV and 24p on some of our projects.
Jim Geib
Executive producer
Twist, Minneapolis
Advertising and spot production continues to be under attack from shrinking budgets and increased competition. The business of advertising has become a global business with agencies and their clients looking at all options available to them. To compete, you must know what the options are and how to best utilize them. It is the job of a production company to advise their clients on how to best spend their money given all the parameters set forth by the agencies. I routinely estimate a job for two, three or more options. I almost always include at least one foreign option. The other thing I have noticed in the past year is the reluctance of agencies to take much of a chance on newer directors. It used to be that everyone was trying to discover the new talent. Now they just want to minimize all risk, and that means going to the same director(s) they have been using.
I believe that the advertising community is looking for additional ways to get their goods and services in front of the buying public. Finding new ways to reach their target audiences is precisely why we formed our branded content division. It’s a little softer sell than traditional spot advertising since it is based in education and entertainment.
Bonnie Goldfarb
Partner/executive producer
harvest, Santa Monica
The state of our production community is definitively in transition. The American public, for the first time since the advent of television, has affordable choices to the networks. While network television remains a viable source to reach the masses, it is alternative methods of outreach that we find ourselves experimenting with. The alternative methods include corporate sponsorship of reality TV shows, Internet content, theatrical release ads, and a focus on branding products through these different mediums simultaneously.
Today at harvest, while for the most part it remains business as usual on a day-to-day front, we find ourselves being contacted by clients directly and freelance creative directors who want to access our roster of directors and our knowledge of production. We are involved in the production of sponsorship advertising, which involves clients like Volkswagen (VW) sponsoring specific programs on non-commercial stations (i.e. the Independent Film Channel). These spots are theatrically driven concepts that tie in VW differently than the traditional :30 format. People are thinking outside the box. On the upside, this has allowed us to maintain more control over the finished product and gain experience working in formats other than :30. However, monetarily these mediums are generally financially challenged, and do not operate with the budgets we are accustomed to. Assuredly, the :30 format has alternate mediums competing against it that will continue to grow, and budgets for these projects will naturally evolve.
Additionally, we find ourselves partnering with agencies and clients on work that is ongoing. … Something we’ve been trying to achieve is to combine production monies to afford the client more content during any given shoot. For example, when we spend television monies to create an environment for a :30 commercial, we’re trying to use the same sets, talent, wardrobe, etc., for print and Internet content. This approach enables the client to create a cohesive package of work for different mediums using our resources simultaneously.
Diversification is as important as ever. However, it is critical that we don’t lose focus of our roots. Often, I have witnessed companies that become fragmented when their only focus is diversification. It is a tentative balance. I also believe that change is necessary to any business and I welcome the new challenges set forth with this diversification. Status quo can be very boring and tedious, while change offers us the opportunity to grow and stretch and try new things.
Overall, while production companies face tightened budgets, severe competition for a dwindling amount of work, and an economy that has been in a downturn since Bush took office, great work is still being produced. Like any business, the inherent nature of a capitalistic structure weeds out the marketplace. Perhaps what we’re feeling is that our marketplace is over-saturated and our business is restructuring to accommodate a record number of commercial directors and production companies.
David Lyons
Executive producer
MOO Studios, Burbank, Calif.
In the past two years, we have noticed a firm pick up. But the work for Moo has changed completely. We have been encouraged to expand the creative field of our work from a narrow specialty of animation to a broader spectrum. The creative challenges come in more forms now, from full spots to tags and mnemonics. Working with an agency to develop the branding that will bookend the spots we produce is our greatest pleasure now.
I think we all want to look like specialists, but I don’t see how a company can survive with that business model any longer. At Moo, we brand ourselves as a high-end animation and effects production house. In reality, we’ve had to become much more than that now. As the cost of postproduction platforms has fallen, the ability to use a computer as a traditional tool has increased, so our workload has moved from the art room to the Mac/PC bays. No longer do we finish projects in the relative luxury of an expensive out-of-house Inferno bay—we can perform the exact tasks for our clients and ourselves under our own roof on lower-end platforms with senior experienced artists. The cost of a week’s Inferno will now pay for 35 days on a lower-end platform with the same artists. Production companies blending with post houses—there can be no bigger change to our industry.
Massimo Martinotti
President/director
Mia Films/The Mia Network,
Miami
The production industry is back on track. More projects, bigger budgets, more push for high quality. During the crisis, the industry learned how to produce internationally for savings reasons. Now clients and agencies are looking at international options from a creative perspective. This phenomenon has happened in the U.S. and abroad: more European clients are coming to America looking for the perfect creative conditions as much as American clients explore oversees options. This pushes production companies to become more international and, eventually, to constitute production global networks.
Because of the combination of the Internet, TVs, DVRs and all the other multimedia devices, the household has become a media network. The integration of broadcast and broadband (without changing the user interface) is going to have a strong impact on how consumers get video content. I believe that this is more an evolution process than a diversification choice. We are going to use our expertise and our international structure to expand our creative options and to offer our clients and directors new possibilities and formats. In this process, we are joining forces with a wide range of creators: writers, musicians, designers, animators, programmers, etc.
The biggest risk the production companies are assuming is being commodities. Therefore, I believe that the biggest challenge production companies are facing is their own branding. … [The brand] should be a combination of a unique culture, an exclusive expertise and an original sensibility that transforms every production into a special experience, no matter which one of the directors on the roster is leading the project.
Yuki Matsumoto
Founder
Shuffle, Marina del Rey, Calif.
The production business is becoming more globalized almost daily. One can go almost anywhere in the civilized world and find production companies doing top quality work. There are now more directors available as a result of this globalization, at a time when advertisers are cutting production budgets and hiring production consultants to monitor costs. The lower cost of shooting commercials outside the U.S. has made the entire industry more mobile and international.
In order to diversify, we at Shuffle are currently looking at alternative markets. As an international company with offices in Tokyo and brand new affiliations in China, as well as long-established relationships in Australia, Latin America and Europe, we can bid around the world very quickly and mobilize a production in short order. Additionally, we are now seeking to produce short films, documentaries and industrial films for our major advertiser clients, [on top of] commercials. We are constantly seeking new creative ways to produce a wide variety of projects, to keep our clients happy.
Sandra Miller
Executive producer
The Production Farm, New York
Production continues to be highly competitive, with A-list directors accepting work that you would never expect. It is an incredibly hard time for young shops and directors to garner work in this marketplace. But that has also bred even more tenacity and drive for those who refuse to be pushed out of the market. So far, 2004 has seen an improving economy, and an increase in board flow. Hopefully, that will continue with more work for everyone. Budgets are lower all the time and turnaround is shorter. But that is a challenge that is always exciting. How to figure out the increasingly impossible and turn it into great creative and a great experience remains our biggest challenge.
With traditional advertising work maintaining a slow pace, we have definitely had to diversify. Brand promotions, network promos, content development and longform work account for a larger part of our business than ever before. … These projects may not always garner the profits of big budget spots, but the diversity and necessity has made us better and smarter at everything we do.
As a company, we continue to face many challenges. An agency producer recently told me that for every job, a producer gets 200 reels. How do you get to the final three in a sea of 200? … We are challenged every day to be smarter and more creative not only in what we put on the screen, but how we produce it.
Tom Mooney
President
Headquarters, bicoastal
The state of the production business? Confused. Things are changing and we have no control over it. But change is a good. If we follow the lead of the clients and the agencies, we’ll be fine. Budgets are tight, but that’s life. I’ll tell you what else is changing: I’m on the road and not on the phone. It’s back to the days when this was a smaller business. I’m on a sales trip right now, and I’m talking to everyone. I don’t know if I’m looking for boards or running for president—I’m kissing babies, McBrides, Grafs, Haydens, Rolfes, you name it, I’m smooching. We have to—we’re all aware that continuing to do high-caliber work is essential, or we’re out!
We’re not diversifying, we’re adapting. The fact is, this is not a :30 world anymore. Strategies change, but I’m in advertising, period, no matter the format. The agencies have tremendous creative resources at their disposal, and we have the directors and production to realize their objectives.
Nancy Osborne
Executive producer/head of sales
Boondoggle, Santa Monica
[Production is] like the weather in Florida—if you don’t like it, wait 10 minutes. The industry is constantly changing, and the only way to survive is to roll with it. To thrive, you have to get over the fact that things don’t function the way they did 10 years ago. It does seem that while most people are still hungry for work, they’re growing increasingly hungry for good work.
I’ve always believed that the beauty of being in a creative business is that you’re encouraged to push the envelope. I want my directors and our company to flex their creative muscles within and outside of the advertising arena. Ultimately, this serves our ad clients. People talk about branded entertainment like it’s something new—we’re involved in it, of course, and we’re having some wonderful experiences. But broadcast advertising has its origins in integrated programming, so to that extent, it’s a throwback, not a diversification.
Greg Pappas
Executive producer
MacGuffin Films, bicoastal
It’s like an athletic competition—you must be prepared to compete each and every day. More times than not, your company strives very hard to even get the nod to bid on a project. Your sales force is working each and every day to expose your directors to agencies. Each project, large or small budget, is treated as if it’s "one for the reel." We respect our relationship with the agency and know that merely shooting the job won’t cut it.
It is essential that the production company establishes a selection of repeat clients—relationships where the agency will consistently come to you, wanting to work with your company and, more specifically, with your director. … The "single bid" is something of an anomaly. The "great phone call" doesn’t cut it. At the very least, you have to be prepared to present a well-written synopsis of your creative approach, complemented by some type of visual splash. Sometimes we may shoot a test on our stage prior to the actual shoot. Often times we’ll shoot a rough version of the spot on digital when we’re on a tech scout, cut it together and use the rough cut as a way to pre-visualize the potential feel of the spot. Basically, it’s collaboration, collaboration. To succeed, your company’s reputation must be driven by the vibe that both the director and the company will consistently deliver a high-quality production and that the company will pay close attention to all aspects of the business at hand.
Gary Rose
Partner/executive producer
Go Film, bicoastal
The business seems to be getting healthier. As the economy rebounds, so will the ad business. But there are a number of hurdles facing the advertiser trying to reach a numb consumer. The television viewing audience has splintered, which has forced advertisers to become more in tune with finding the demographic they are trying to reach. What does that mean to those of us in the production community? It means the diversification of the client’s advertising dollars—in other words, less cash to produce a conventional :30 spot. Producers and directors are going to have to continue to be creative and efficient in how they produce. Less money will equate to less time to shoot a spot, which inevitably will mean less variation on set and editorial options afforded to an agency. Fewer jobs shot on stage, less on-camera talent, not enough film, no sushi on the craft service table, and fewer nights spent at Shutters on the Beach. But each day is so much darn fun, what else would we rather be doing?
Production company principals have always diversified. They have invested in editorial companies, restaurants, real estate ventures, television, motion pictures and other businesses. What’s important for those of us in the advertising business is to understand where the new advertising revenue streams will take us next. Advertising isn’t going anywhere—it’s just changing. As the pipelines, screens and other new venues become viable to advertisers, there will always be emerging opportunities for creative people who have the ability to get consumers to buy something they don’t really need in the first place.
Frank Scherma
President
@radical.media, bicoastal/
international
We’re lucky that the production business continues to evolve, change and metamorphose, which keeps our lives constantly interesting. Advertisers and their ad agencies will continue to scan all horizons to reach consumers. Television commercials will still be a way to reach them, but not the only way. We must be able to provide services to our clients to help them reach as many consumers in as many different ways as possible. In this respect, our mission must be to serve as a resource for advertisers and their ad agencies.
We will always do television commercials, as advertisers can still reach an incredibly large audience through that medium. As for diversification, we’re addressing this in a number of ways. For example, we’re creating and producing branded content with ad agencies and their clients. We’re creating mini video games for clients to reach the ever-elusive young male demographic. We’re working with the music labels and artists’ managers to create music videos and content for their talent. We’re producing live events that are sponsor-driven. We’re producing Web sites for clients. We’re creating graphic design work for television shows, movies and brands. Finally, we’re producing original movies and television shows. Production companies will need to be able to quickly and ably respond as the advertising business continues to evolve. We must stay excited about the future and not look back to what was in the past. And above all, we must keep having fun.
Rhea Scott
Executive producer
Little Minx, Los Angeles
The first and most prevalent problem for us all is the drop in margins. Although it has become an affirmed certainty in our business, it is sometimes a little easier for a small company like Little Minx to navigate through as I keep my overhead quite low, and inherit the big system from RSA USA. I think that our satellite system has been successful in dealing with the problem of dropped margins, as our arrangement benefits and helps us both. It takes some of RSA’s overhead off their shoulders, passes it on to me and allows me to function at a much higher level—a level I could not achieve if I were completely on my own.
It also creates a safe haven in which to develop younger directors who would probably get lost otherwise. That safety allows me to respond well to creative jobs that are challenged financially. (Although there seems to be more and more of these lately and we have to make some tough choices.)
Right now there is less work out there, while at the same time, there are more and more available directors within the U.S. Unless a foreign director is truly amazing and at the top level in Europe, it is nearly impossible for him to break into the market in the States. It was much easier before to introduce new foreign blood than it is now.
My approach to developing Little Minx has always been to maintain a roster of directors that I wanted to grow with and expand into other formats. … [Diversification] is different with each director. … My main focus for now is advertising—in the :30, :60 or three to four minute format—do well there and move on to other mediums. Use it as a stepping stone to documentaries and/or films—whatever the state of the industry, that’s the goal.
Lauren Schwartz
Owner/president
kaboom productions,
San Francisco
The start of 2004 has certainly shown more promise than the two years past. There is no doubt in my mind that the production business, in keeping with the economy, is coming back. That being said, the economy is only coming back in fits and starts, and the production business is no different.
Additionally, it’s always said in our business that "advertising/marketing is the first to go and the last to come back" and so, despite some of the positive market and economic indicators, our business lags behind. My feeling is that we won’t see a real "comeback" until the end of the second quarter/into the third quarter.
We are working harder and harder to get jobs. The work we fight for is stuff that was easy to come by before, and that is just a trickle-down effect. It’s happening across the board with all production companies. Higher-level directors are pursuing work they wouldn’t have done previously and so this impacts everyone. Of course this is nothing new, nothing that we haven’t heard in the last two years.
In some respects, this shift, though challenging, has prompted companies to assess business models and increase efficiency, embrace diversification and work smarter. We also keep the process fun, both for the directors and the clients. This is a great business, and we love the work we do. Hopefully that shows in each project.
Diversification is important. Companies need to position themselves as being flexible about doing a variety of work. I have always believed that this is a business of relationships and trust, and if clients have diverse production needs, we want to be the source they turn to for a diversity of projects. … Within the commercial industry, we are flexible and diversifying, and within a variety of mediums, we are diversifying as well.
We are at a critical juncture in the state of the industry. It is important for U.S.-based production companies to foster work at home, and also be internationally connected. Achieving both these goals is essential to staying in business in this ever-competitive and global industry.
David Tate
President/executive producer
TateUSA, Santa Monica
The production business has changed immeasurably. Commercials that don’t communicate will not survive, nor will the companies and people who produce them. Production companies have to play a more conscious role in the advertising aspect of production. Good filmmaking and entertainment is not enough. Agencies expect the director to be a specialist in the art of persuasion.
Through the gyrations of economics, the business of advertising will always be the same—communicating. The core focus of TateUSA is to ensure that the art of communication is discussed, developed and deployed, and use the essence of that communication to come up with the most financially efficient means of production.
Those that embrace these principles will be seen by agencies as more important partners in the creative process, rather than just the current home of the director they want. And agencies have another good reason to want stronger partnerships—money. Increasingly, advertisers look at marketing with the same critical eye they train on the other aspects of their businesses. Agencies are pressured to deliver commercials for pre-determined budgets derived from overall allocations that have little or nothing to do with the reality of production. This scenario is unlikely to change.
If these partnerships through communication grow, building the volume of repeat business, agencies can call on their production partners to help reconcile these financial impossibilities, or even avoid them by earlier inclusion in the process.
Diversification has long been an avenue that commercial production companies have pondered, but is it a natural outgrowth of our business? When agencies look to hire a production company, a graphics company, a photographer, a design company, there is little interest in what diversified aspects that company can provide. When production companies diversified into music videos, it was as a creative stimulus for directors rather than an additional income source. Today, successful music video companies are either independent or at least separated from their commercial parents.
The current discussion about branded content has determined that it has yet to establish itself as a sufficiently viable business. We live in the world of the specialist. A specialist is likely to solve problems better than a non-specialist. It seems to me that for production companies to diversify is largely missing the point. Recognizing this has helped TateUSA to better understand the purpose and possibilities of diversification. We make short films for the fun quotient, and we have developed ideas for branded content. But the advantage of diversification is always judged by its ability to enhance our chance at communicating an advertising idea. Diversification, by nature, takes energies away from supplying, supporting and nurturing the core of our business. This compromises the economic foundation of a production company, the very foundation that the desire for diversification is hoping to uphold.
Camille Taylor
Co-founder/executive producer
Crossroads Films, bicoastal
and Chicago
To make a long story short, the industry is relentlessly competitive.
We have been diversifying for a long time. We’re committed to editorial, design, postproduction, music videos, TV and features. We are also increasingly active internationally. It not only broadens our view and our opportunities, it enables us to serve our clients more creatively by drawing on diverse talent pools and more efficiently by housing more resources. Both save time and money. The issue is to offer this up at a consistently high level.
Mark Thomas
Partner/executive producer
Thomas Winter Cooke,
Santa Monica
The state of the business is cautiously optimistic. There seems to be little consistency though—it can be very, very busy, followed by silence. I do believe that there are signs pointing to an increase in activity. We are in both an election and Olympic year, and traditionally that bodes well for board flow. That being said, "downward market pressure" (extreme competition for challenged budgets) remains a reality for all of us.
Any credible business consultant will tell you that just doing one thing really well has the most risk, with potentially the most reward. The tech stock crash of a few years ago taught most of us a lesson about having a diversified portfolio. We remain committed to our core mission of making great commercials based on strong, simple concepts, but now on a global stage. We are looking at the industry as a world event. Additionally, we think that a good filmmaker is a good filmmaker, be it for 30 seconds or two hours. My business partner, Ralph Winter is committed to finding projects that we can produce and that our directors can helm in longform. Our other partner, Philip Cooke is currently prepping an eight minute branded content film for Asahi Beer from Dentsu, Tokyo. This diversification allows for filmmakers to flex their muscles in different disciplines, whilst remaining under the covering of one production house.
Thom Tyson
Executive producer
Chuck Sloan
President
Plum Productions, Santa Monica
Every day is a new challenge as advertisers continue to have creatively ambitious projects that are financially challenged. As a company, we have to be even more inventive and aggressive in coming up with solutions that realize the creative, while being smart as to its execution. As the dollar shrinks in power, offshore solutions are no longer an easy option. Production is never easy, but it is still a lot of fun. Every day is an opportunity to learn something new—that part has not changed. Getting there has. Rearview mirror thinking is not an option in an increasingly competitive marketplace.
If it is diversification out of desperation, forget it. It is far more important for an established commercial company to pay attention to its core business of producing television commercials. Statistically, if you commit the financial resources, time and energy that it takes to succeed in the feature or television world, it is good for the ego, but a long shot at best to succeed, and you will probably end up homeless. Branded content etc. is nothing new, just more of it for less money than a few years ago. This is a good area to get your feet wet and have fun, but it is a few years away from becoming a viable revenue source. Of course, revenue is relative to overhead. There are always exceptions and maybe you will get lucky.
Steve Wax
Partner
Chelsea Pictures, bicoastal/
international
I see the changes that everyone discusses ad nausea—the consolidation of directors at a few large companies, increased competition between companies, killer budget constraints, blah, blah, blah.
More interestingly, I’d say, is a developing role for companies reflecting values last seen during the ’60s and ’70s in the spot business (from what I hear!). This trend, which I mostly welcome, involves greater creative, administrative and financial responsibility on campaigns for production companies (including funding certain projects in the hopes that clients will buy them), company executives reworking creative alongside their directors, and even our helping sell creative to clients. Oh yeah, and managing postproduction.
The funny thing about diversification is that production companies need to diversify. We must protect ourselves by extending our skills into branded entertainment, television, etc. But at the same time, we need to focus on our core business—commercials—because this business has become tougher and tougher. Sounds like we need to head off in two directions at once, no? In the past year, Chelsea has produced numerous commercials but also a documentary, a four-part comedy series for TV, and an award-winning net marketing campaign. These sorts of non-spot projects came more easily than commercials, so we’re even more focused on commercials! The more things change, the more they stay the same.
